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Ryan, Wyden back a new Medicare option

Ryan predicts the market would look like the Federal Employees Health Benefits Plan, one that insurers want to participate in because of its predictability, stability and large pool.

Wyden and Ryan argue that the consumers’ choices will drive insurers and Medicare to be more efficient and price conscious, which would drive down all Medicare spending. If not, they would require Congress to act if Medicare spending growth exceeded the Gross Domestic Product plus 1 percent.

While IPAB would have a 15-person board decide what to cut when the spending triggers are hit, the Wyden-Ryan plan requires Congress to intervene and choose what to cut, such as provider reimbursements, overhead or means-tested premiums. They’re still discussing if and how it would be enforced.

“Rather than have a group of 15 people impose price controls to live within a cap, we’re giving the power to senior citizens through choice and competition to let the market make those decisions with them,” Ryan said in the joint interview.

The plan also would allow businesses with 100 or fewer employees to offer their employees under 65 the option of buying coverage on the free market instead of at work — with the employer contributing the same amount they would have paid for employer-sponsored insurance. This is similar to the “free choice” vouchers Wyden has favored.

At first blush, Wyden and Ryan may look like an unlikely duo to team up on a Medicare reform plan. But they share an interest in policy over politics and both have worked on health policy issues and bipartisan bills.

On health care especially, Wyden has shown that he’s willing to work outside of what his party supports. During the health reform discussions in 2009, he supported eliminating the employer sponsored tax benefits on a bill co-sponsored by former Sen. Bob Bennett (R-Utah).

After the reform law passed, he introduced a bill that would allow states to implement their own reforms more quickly than the law would let them, as long as they covered as many people.

President Barack Obama publicly endorsed that state flexibility but Majority Leader Harry Reid hasn’t put the bill on the floor.

Ryan has a record of bipartisanship, too. He and Alice Rivlin, who led the budget office for former President Bill Clinton, released a Medicare reform plan, too, although the version that Ryan led through the House went farther than Rivlin could accept.

Wyden’s move is unlikely to go over well with Democratic leadership. Politically, Democrats feel that Ryan’s plan gave them the upper hand on the Medicare message ahead of a pivotal election year.

Both Ryan and Wyden acknowledge that any Medicare reform proposals can be quickly turned into a political weapon by the other side. But they hope that by releasing a detailed plan without legislative text — and the worry about having to decide whether to vote for it or not — can help foster serious discussion.

“People don’t have to descend on their congressperson [and say,] ‘Don’t vote two weeks from today for such and such,’” Wyden said. “This is a chance to get beyond the discussion that’s been held.”

This article first appeared on POLITICO Pro at 5:11 p.m. on December 14, 2011.

Readers' Comments (46)

So what are the odds this is another unfunded fiasco like the Ryan Budget?

If ya want to kill Medicare or hand its funds over to your special costitutents who lobby you, just say it and be done with it, I say. On the other hand, these guys keep number crunchers busy debunking their crazy speil. But... silly waste of everybody's time on balance.

Wyden and Ryan argue that the consumers’ choices will drive insurers and Medicare to be more efficient and price conscious, which would drive down all Medicare spending. If not, they’d require Congress to act if Medicare spending growth exceeded the Gross Domestic Product plus 1 percent. The cap is a new feature that is designed to ensure that Medicare spending would be kept under control.It a somewhat similar concept to the health reform law’s Independent Payment Advisory Board, which requires action when Medicare spending hits a certain level. Republicans strongly oppose IPAB. While the IPAB requires a 15-person board to decide what to cut when the spending triggers are hit, the Wyden-Ryan plan requires Congress to intervene and choose what to cut, such as provider reimbursements, overheard or means-tested premiums. They’re still discussing if and how it would be enforced.“Rather than have a group of 15 people impose price controls to live within a cap, we’re giving the power to senior citizens through choice and competition to let the market make those decisions with them,” Ryan said in the joint interview.

This is already confusing. See the underlined comments above. Is Congress to control what to cut, or do seniors somehow make this choice?

Can we really expect such an intransigent and uncompromising Congress to choose what to cut? The IPAB remains the preferable option, in my opinion. Some form of rationing must occur, and is best created by evidence-based medicine, and not by the Kabuki theater of Congress.

This is going nowhere. Paul Ryan needs to get into his dumb head that private health insurers and Medicare do not mix. And they will never mix because Medicare is a non-profit venture while private insurers are in the game only to make money. They don't care if they are insuring sardines, people or pingpong balls. How many times do we need to underline this? You can't have 100% for profit health insurance because we do not have enough competition in the health care industry. The same is true of the military, the space exploration, nuclear research and similar mission critical ventures. None of those can be done for profit because they are enormously expensive for any company or even a handful of companies to tackle. You would have to have dozens of players in each of those fields to make those projects economically viable and sustainable. The same is true of the health care industry. If you want to go all private you have to take every single insurance company and break them up into at least 4 or 5 independent companies with built in stipulation that prevent any merges within the industry. If you do poorly, you die. You don't get to swap stocks with someone else and stay afloat through assimilation. Then you make them compete and let the open market provide checks and balances while reducing the overall cost. The current system is broken because there is not enough competition. To fix it, we either go all non-profit or we break up the health care oligopoly. Take your pick, Congressman Ryan.

Great, more congressional parasites gutting a program people have paid into, while keeping their overly-generous, involuntarily-subsidized congressional pensions, along with further taxpayer funding of their congressional health insurance premiums and health care costs.

Immediately eliminate ALL taxpayer-funded congressional perks like those listed above, and reduce congressional salaries to that of the average US wage earner, that's the only way to ensure these congressional slugs can't be hypocrites in gutting the social safety net while keeping their own undeserved benefits.

This plan does "means test" which is code word for middle class and upper middle class will not get coverage. The poor seniors will get aide until they get treated like welfare receipents and the dollars will be the first cut in tight budget years. Poor people don't have resources for lobbyist so good bye grandma. If you worked hard saving in your 401k and get a pension you will be told to buy your own insurance. The problem is insurance is for profit and you can't make a profit with old people. The average policy in your 60's would be $50,000 a year this would wipe out 401k savings after a few years.

The problem with medicare is simple raise the rate. Assume you make $100,000 a year for 30 years (assume today's dollars) that means you paid in less than $60,000 over a lifetime of workin under the current rates. That isn't enough for 3 years of medical health insurance when you are in your 60's. Furthermore the average salary is probably closer to $50,000 since the cap is at $106,000 so this means only $30,000 was paid in.

Medicare is a great program. The private insurance market sucks because they are for profit and they decide what is covered and what isn't. Being old is a pre existing condition. Does medicare have problems. Yes but overall it is a good program but it needs tweaking.

Too many people want to live for today and not save for retirement. Medicare is a great way to save for retirement.

Just like in Ryan’s House budget, seniors would get premium support — a government subsidy that’s also been dubbed a “voucher” — to help buy coverage, whether in the private market or through Medicare.

Wyden insists the plan would be designed in ways that would preserve the safety net for the elderly.

“I will never do anything to shred that or weaken it or harm [Medicare] in any way,” the Oregon Democrat said. “I simply believe that there is now an opportunity for progressives and conservatives to come together and to strengthen the program for the long term and particularly, deal with the costs and demographic challenges.”

i'll believe this when i see the fine print mr wyden.... i recall your bipartisan health care reform effort with utah republican senator bennett, bennett wyden, that was adopted by mccain in '08 as his health care reform plan. that plan would have treated employer contributions to health insurance as a "taxable bennefit"- "compensation" to the employee while the employer would remain able to take deductions against those contributions.

Ryan and Wyden plan to release a white paper with more details Thursday at an event sponsored by the Bipartisan Policy Center.

or CBPP the Center for Budget and Policy Priorities whose analysis has always been based on the same information provided by congressional members to CBO and other data streams available to CBO- yet many republicans regard as some neo-liberal partisan org. even ryan himself took issue with their initial analysis of his plan for the EXACT same reasons CBO wouldn't call their analysis a "score"- NOT ENOUGH DETAIL

TeamPOLITICO: Dec. 14, 2011 - 5:48 PM EST

The Wyden-Ryan plan has other significant differences from Ryan’s original proposal: It institutes a series of consumer protections for seniors, it installs a cap on total Medicare spending and changes the way premium support is calculated.

i'll take that to mean that "premium support" WILL at the minimum keep pace with inflation and cost of living- excluded from ryan's original plan.

Obama took $500 billion OUT of Medicare recently as a down payment on Obamacare. NO program can survive with that kind of money being syphoned out of it! Same with Social Security, only in that case, everyone will just pay in less now. Will it affect benefits later? Yeah, but why worry about that now, right? That extra few dollars a month is critical NOW...... shaking head in disbelief ...

At the same time, many articles are being featured about boomers who are worried that they don't have enough money saved to fund a decent retirement. Go figure.......

The only way this works is everyone moves into exchanges. You end the employer health insurance coverage, you end Medicaid, Medicare, SCHIP, and you put in place a national (of state based) exchange of regulated private insurance companies with a general fund used to cover those who dont get insurance (i.e., the mandate, which is the requirement that thsoe without health insurance pay a tax). Subsidies would then be given to the those who would have been on Medicaid and Medicare or the government would simply buy insurance plans for the poor and seniors with the money being spent today on Medicare, SCHIP and Medicaid.

This would make healthcare insurance coverage into something far more like car insurance. It would keep competition, but streamline the market, which would take out a lot of costs from the current systems of overlaying and interlaced health coverage.

The problem with this solution is that it would drive both bases crazy, but it would probably make for a much better health insurance and health care market.

Polgara, if you are going to make stuff up, you have to do it in a way that makes at least some sense. Why would Obama who is a Democrat do something that only a Republican would do? Obama did not take $500 billion out of Medicare. He took $500 billion out of Medicare Advantage which is a private supplemental insurance program that covers things that Medicare does not cover. He used that money to pay for his new program that actually provides better coverage.

"Although the Patient Protection and Affordable Care Act of 2010 does not eliminate Medicare Advantage, it does do away with the subsidies which the federal government first used to establish the Medicare Advantage program and which many Medicare Advantage health insurance plans use to offer supplemental benefits. These subsidies (which added an additional $14 billion to the Medicare program last year alone) will gradually be reduced until they are eliminated altogether. In 2011, these Medicare Advantage subsidy payments will be frozen at 2010 levels. After that, Medicare Advantage subsidy payments will be reduced an average of 12% per year until they are brought in line with traditional Medicare payments.[5] [edit]"